Set to overachieve on $10-billion India investment target: Softbank CEO Masayoshi Son
NEW DELHI: SoftBank will “overachieve” on its commitment to invest $10 billion in 10 years in India “much ahead of time and at a much bigger scale” than it had anticipated, as the Japanese telecom and Internet major has already invested more than $7 billion in past four years, according to CEO Masayoshi Son.
The world’s most influential tech investor with a $100-billion fund that backs household names like Flipkart and Ola here, also sees opportunities for Indian portfolio firms such as Oyo to go overseas and become global leaders while bringing its overseas portfolio companies here. Son is on a three-day trip to meet with entrepreneurs and PM Modi.
Son was to meet the PM on Sunday. “The first time I met him (PM Modi), I made a commitment that we will invest $10 billion in India. Some of our guys said don’t give too (high a) number which we may not able to achieve. But we have invested over $7 billion in four years,” Son said.
“We would definitely overachieve on our commitment much ahead of time and at a much bigger scale,” said Son, in an interaction with ET. The 60-year-old billionaire is excited about Indian entrepreneurs coming up with unique models that can be scaled globally, citing the example of hospitality brand Oyo Rooms.
“There are some examples of young Indian entrepreneurs creating new original models ahead of the world, such as Oyo…There are many business models created in the US, China, and Japan, but not much in India in the past. But young entrepreneurs in India are creating very unique models that can scale worldwide, which is exciting,” said Son.
Oyo works with small- to mid-sized independent hotels to help standardise the experience for customers while they come under the fold of its brand, which started online. Founded by now 24-year-old Ritesh Agarwal when he was in his teens, Oyo operates these hotels under franchise or management arrangement.
The company has already expanded to Southeast Asia and is set to enter China and Europe.
Son also cited the example of how Ola has localised ride-hailing for India with autorickshaws, and if the experiment with electric rickshaws succeeds, it can be deployed in other markets as an affordable offering. He declined to comment on a potential Uber-Ola consolidation and Flipkart’s talks with Walmart and Amazon.
Besides taking ideas and companies from India overseas, SoftBank also sees a big opportunity for its portfolio companies here.
“But the reverse is happening as well. We have invested in 34 companies in the Vision Fund in the last one year since we started, and I think 10 of those companies will come to India,” said Rajeev Misra, CEO of the SoftBank Vision Fund, who also sits on the SoftBank board.
The companies may set up joint ventures in India and the list includes German online car dealer Auto1 and Katerra, a technology-driven offsite construction company.
Since it actively started investing in mid-2014, SoftBank has become the biggest backer of India’s digital entrepreneurs, investing in companies such as ride-hailing app Ola, online marketplace Snapdeal deal and Oyo Rooms. By the end of 2015, SoftBank had invested a total of about $1.5 billion in over half-adozen companies.
According to Son, ease of doing business in the country has improved since it started investing as “India is evolving very quickly”. But there are still challenges in the economy for his portfolio companies to achieve full scale.
“The network could be better, the logistics for ecommerce could be better, the average GDP per capita and consumption should grow for the bigger business opportunities which I think is coming very soon. Those are the issues but those are the opportunities,” he said. Since announcing the $100-billion SoftBank Vision Fund, his firm has started writing much bigger cheques and betting on market leaders, pouring a collective $4 billion last year into online retailer Flipkart and payments major Paytm.
This year, SoftBank has invested $400 million in Paytm Mall and is in advanced talks to pick up a stake in Policybazaar, as ET had reported earlier.
One of the driving forces behind the Vision Fund has been ‘singularity’, a concept that describes a state of affairs where artificial intelligence (AI) outstrips humans and takes over a number of jobs. But according to Misra, fears that AI will lead to massive unemployment is just overseeing the benefits it may bring to an economy like India.
“I think it is wrong to say that there are going to be job losses because of AI. Demand exceeds supply. There is not enough skilled labour in the country,” he said, adding that AI could be used to train doctors and teachers. “Using AI, we can educate a primary healthcare worker, deliver telemedicine and diagnosis.”